Binance and WazirX disagree on ownership two years after announcing deal – TechCrunch

Binance, the world’s largest cryptocurrency exchange by trading volume, said on Friday that it does not own India-based platform WazirX despite revealing the acquisition two-and-a-half years ago in a move that has baffled cryptocurrency players. industry, including the Indian firm that insists the purchase was made.

Changpeng Zhao, founder and CEO of Binance, said in a series of tweets that the company has been “trying to finalize the deal for the last couple of years” but has yet to complete the transaction citing “some issues” that he declined to elaborate on.

Binance announced the acquisition of WazirX in late 2019 in a blog post. The official blog post, which included an image of the founders of Zhao and WazirX, also showed the Binance executive’s enthusiasm for the deal.

“The acquisition of WazirX shows our commitment and dedication to the Indian people and strengthens the blockchain ecosystem in India, as well as another step forward in achieving the freedom of money,” he said in the 2019 post.

WazirX also reported that it had been “successfully acquired by Binance” in a separate blog post.

A tweet from Zhao last year sharing a news story about WazirX, where it is described as being owned by Binance.

Zhao said on Friday that Binance does not “own shares in Zanmai Labs,” the entity that operates WazirX and established by the original founders.

“On November 21, 2019, Binance published a blog post saying that it had ‘acquired’ WazirX. This transaction was never completed. Binance has never, at any time, owned shares in Zanmai Labs, the entity that operates WazirX,” he wrote.

“Binance only provides wallet services for WazirX as a technology solution. There is also integration using off-chain tx, to save on network fees. WazirX is responsible for all other aspects of the WazirX exchange, including user registration, KYC, trading, and initiation of withdrawals,” he added.

The clarification follows India’s Enforcement Directorate freezing WazirX’s assets worth more than $8 million, citing an alleged foreign exchange rule violation.

“The recent allegations regarding the operation of WazirX and how Zanmai Labs manages the platform are of deep concern to Binance. Binance collaborates with law enforcement agencies around the world. We would be happy to work with ED in any way possible,” added Zhao.

India’s anti-money laundering agency said in its order on Friday that Binance rarely responds to inquiries sent to its official legal compliance email address.

WazirX is the largest crypto exchange in India by trading volume. Its annual trading volume topped $43 billion in 2021, a “1,735% growth from 2020,” the company said late last year. The platform also provides its technology to various other Indian exchanges.

Nischal Shetty, co-founder of WazirX, has disputed Zhao’s claims, stating that Binance did in fact acquire WazirX. In a series of tweets, he said:

The public dispute over ownership took an even stranger turn on Saturday. In a tweet, Zhao said that Binance asked WazirX to transfer the system’s source code, implementation, and operations in February this year, a request he said WazirX refused. “Binance has no control over its systems. WazirX has not been cooperative with us and does not appear to be cooperative with ED either,” he added.

Since then, Shetty has also doubled down on his claim that Binance owns WazirX, a claim that Zhao has labeled “hoax.”

The story has been completely updated to include additional details.

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